How Does a Settlement Agreement Impact me Getting a Job in the Future?

If you have recently negotiated a settlement agreement with your current employer, and you’re looking to take on new work, you may be wondering how this agreement impacts your ability to find a job in the future. 

Luckily, there should be clauses contained within the settlement agreement that can ensure a mutually beneficial contract. However, there are still some issues that may arise that you should be aware of when moving forward with your career. 

You will have had to take independent legal advice on the terms of the settlement agreement. If you have been issued with a settlement agreement, and not yet received the advice, please get in touch with us today, either by emailing sa@smithpartnership.co.uk, or calling us on 08000 32 32 02, and we will be happy to help. 

Can a settlement agreement restrict your ability to get work? 

In some circumstances, a settlement agreement may restrict you from working for someone else for a dictated period of time, such as going to work for a direct competitor, which could lead to the poaching of clients, or you going to a job that could damage your previous employer’s reputation or contracts should the contents of the agreement be disclosed. This is referred to as a restrictive covenant and may also be covered by the confidentiality clauses contained with the settlement agreement. 

If you specifically resign to go to work for a direct competitor or rival, you may be placed on ‘garden leave’ for a specific amount of time where you will be prevented from attending the workplace or contacting clients, but you will continue to receive your salary and benefits. If there is no garden leave clause within your contract of employment, your employer may try to build this into a settlement agreement instead to protect their business interests.  

You should ensure that you compare any covenants in your settlement agreement to your original contract of employment before you agree to any restrictions, and receive independent legal advice on the clauses themselves. 

Can a settlement agreement impact my reference? 

As part of your settlement agreement negotiations, there may be a clause that states your employee's willingness to provide you with a satisfactory reference, and usually this will also be annexed to the agreement so that the wording is agreed in advance. However, it is important to remember that this is not a legal requirement of settlement agreements and is something you should specifically ask for as part of your agreement during negotiations.  

Settlement agreement solicitors for individuals can ensure that important elements are negotiated and included in your settlement agreement to ensure you get the best possible outcome.  

Can you disclose a settlement agreement? 

Typically, settlement agreements include a confidentiality clause which requires both the employer and the employee to keep the terms of the agreement confidential. This typically covers details such as the amount paid out to the employee and also the fact that a settlement agreement has been signed. 

This is beneficial for both employer and employee, as it can protect both parties' reputations and privacy. 

If you interview for a new job after a